Model train set maker Hornby posted a widening of its full-year losses on Tuesday as it said current sales were lower than expected.
In the year to 31 March 2018, the company made a reported pre-tax loss of £10.1m compared to a £9.5m loss the year before, as revenue fell to £35.7m from £47.4m.

Meanwhile, exceptional items were £2.3m versus £3.3m in 2017, including costs relating to the restructuring of the business and refinancing in 2017.

The Scalextric maker said group sales for the 10 weeks to 8 June are lower than it expected due to the ongoing impact of insufficient investment in tooling in the past, and the late placing of purchase orders with suppliers. In addition, it noted a backlog of stock at its retailers from previous decisions to bring sales forward by discounting, which it said will take time to work through.

On the upside, however, gross margin for the 10 weeks was 5 percentage points higher compared with the same period last year, reflecting the absence of discounting initiatives since October 2017.

Chief executive officer and interim chairman Lyndon Davies said: "In the first seven months that I have been at Hornby, we have assessed our position and confronted the reality of the situation in which we find ourselves.

"Tough decisions have now been taken and we are currently laying down the foundations for our future success. There is a new energy in the business and I am excited with our plans as we re-engage across both domestic and international markets with these well-loved brands."

At 0900 BST, the shares were down 17.3% to 21p.

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